Manzana announced Monday that it will suspend sales of its Series 9 and Ultra 2 smartwatches in the United States starting this week, while it resolves patent litigation over the technology that enables blood oxygen sensor functionality in the devices.
The measure comes after the United States International Trade Commission (ITC) issued an order in October that could prohibit Apple from importing its Apple Watches, considering that the devices violate the patent rights of the medical technology company Masimo.
Apple shares fell 1.4% after hearing the news.
A presidential review period is underway on this feature and, although the review period will not end until December 25, Apple is taking preventive measures to comply with the ruling if it is upheld, the company reported.
The company said it would suspend sales of the watches on its website starting December 21, and at Apple retail outlets after December 24.
Ryan Reith, program vice president for mobile device tracking at research firm IDC, said Apple Watch holiday sales in the United States will not suffer and that the full impact of the bug, if sustained, will typically arrive in January and February. some of Apple’s slowest sales months in the country.
“Apple has a large inventory of the Watch 8 and SE, so they will have products available during that time,” Reith said. “The biggest implication is around whether or not Apple can use the blood oxygen sensor technology at issue in future devices, or whether they will have to reach a deal or come up with a new solution.”
Apple has about a quarter of the global smartwatch market, according to Counterpoint Research, a share that typically rises to more than a third in the fourth quarter, during the holiday sales seasons in the United States and Europe.
Both the Series 9 and Ultra 2 would continue to be available for purchase outside the United States, including during the Lunar New Year season in Asia.
Apple believes the ITC’s decision is erroneous and should be overturned, and intends to appeal the decision to the Federal Circuit.
Masimo has accused Apple of recruiting its employees, stealing its pulse oximetry technology and incorporating it into the popular Apple Watch.
A jury trial over Masimo’s allegations in federal court in California ended in a mistrial in May. Apple has separately sued Masimo for patent infringement in federal court in Delaware, calling Masimo’s legal actions a “pavement maneuver” for its own smartwatch.
A government has not vetoed an ITC ruling since 2013, when President Barack Obama’s administration overturned an import ban on Apple iPhones and iPads over a patent dispute with Samsung.
In February, the Biden administration decided not to veto another import ban on Apple Watches based on a patent infringement complaint from medical technology company AliveCor. The ITC has put the ban on hold for other reasons.
Apple’s wearables, home and accessories business, which includes the Apple Watch, AirPods headphones and other products, achieved revenue of $8.28 billion during the third quarter of 2023, according to a company report.
